Hammond Said to Decide Against Osborne’s 15% Corporate Tax Rate

  • Chancellor said to confirm that U.K. will stick to 17% plan
  • EU finance ministers talked with Hammond in Bratislava

Chancellor of the Exchequer Philip Hammond told European Union finance ministers that the U.K. government won’t lower its corporate tax rate below 17 percent, according to three people with knowledge of the talks.

Hammond, who spoke Saturday during a meeting with his EU counterparts in Bratislava, Slovakia, said the British government won’t follow through on previous Chancellor George Osborne’s target of 15 percent, said the people who asked not to be identified because the discussions were private. A U.K. Treasury spokesman didn’t immediately respond to a phone message seeking comment.

In the immediate aftermath of Britain’s vote to leave the EU in June, then-Chancellor Osborne said a tax rate of 15 percent would mitigate the impact of Brexit. Britain currently has a 20 percent rate for business that’s scheduled to fall to 19 percent in April and to 17 percent in 2020.

Hammond has in recent weeks sought to calm jitters in the financial industry about the fallout of Britain’s withdrawal from the EU. He told a House of Lords committee this week that EU countries have much to lose if they seek to restrain the City of London and any effort to shift clearing operations away from the U.K. capital could benefit New York more than Europe.